Rupee off intraday high, USDJPY up

Friday,   12-Oct-2018   12:30 PM (IST)

The Indian rupee trimmed the intraday day gains and is currently trading at 73.80/81 levels (12:22 pm) in the afternoon deals on dollar buying in the market. Rupee opened at 73.83/84 levels today and moved up to 73.60/61 levels as weaker-than-expected U.S. inflation data dragged the dollar index to a two-week low. Also aiding sentiment for the rupee was the overnight slump in benchmark Brent crude oil contract, which fell to $80.26 per barrel, amid the rout in global stock markets and larger-than-expected build-up in the U.S. crude inventories. Currently Brent crude is 81.32 levels (12:00 pm). The benchmark indices are trading higher with the Nifty50 reclaiming 10,400 levels. At 12:17 PM, the S&P BSE Sensex was trading at 34,686, up 685 points while the broader Nifty50 was ruling at 10,444, up 210 points. As per the technical indicators range for the USDINR pair may be 73.40-74.20 levels. Rupee has an immediate support at 73.88 levels. A breach of the same may see rupee at 73.97 followed by 74.11 and 74.25 levels. On the positive side rupee is likely to face resistance at 73.64 levels and if it is able to break the same then it may gain up to 73.50 levels followed by 73.41 and 73.31 levels. The government will release Consumer Price Index-based (CPI) inflation and Index of Industrial Production data today after market hour.

The USD/JPY pair reversed an early dip to the 112.00 handle and has now moved within striking distance of overnight swing high. Despite Thursday's follow-through sell-off in the US equity markets, the pair showed resilience below the 112.00 handle and managed to register a goodish recovery from near one-month lows, set in the previous session. A goodish recovery in the risk sentiment, as depicted by initial signs of stability in global equity markets, undermined the Japanese Yen's safe-haven status and assisted the pair to gain some positive traction on the last trading day of the week. The pair now seems to have snapped six consecutive days of losing streak and was further supported by easing US Dollar bearish pressure. With investors looking past Thursday's softer US consumer inflation figures, some renewed pickup in the US Treasury bond yields turned out to be one of the key factors lending some support to the greenback.  It, however, remains to be seen if the pair is able to build on the positive momentum or once again meets with some fresh supply at higher levels, especially after the US President Donald Trump's criticism over the pace of Fed rate hikes.  Later during the early North-American session, the US economic docket, featuring the release of Prelim UoM Consumer Sentiment, will now be looked upon for some short-term trading opportunities. The Euro is trading little changed on the downside just below 1.1600 against the US Dollar after German inflation met market expectations dwelling at 2.2% over the year in September. The uptrend on EUR/USD remains intact with US consumer confidence headlining Friday afternoon session.